While many Canadian tech companies are feeling the pinch of falling valuations and tepid revenue growth, March Networks is experiencing a renewed sense of vigour.
While many Canadian tech companies are feeling the pinch of falling valuations and tepid revenue growth amid a widespread market selloff in 2022, March Networks is experiencing a renewed sense of vigour.
The renaissance began when the Kanata-based video-surveillance software firm
was acquired by Taiwanese manufacturing giant Delta Electronics late last year.
March Networks CEO Peter Strom says Delta, which has annual revenues north of US$10 billion, immediately made it clear it was ready to put its money where its mouth was when it came to pursuing a more aggressive growth path for its newest acquisition.
For Strom, who’s been at March’s helm since 2003, that commitment signalled a seismic shift from the more conservative approach taken by the firm’s previous owners, New Jersey-based Infinova.
“We weren’t really able to invest as aggressively as we liked in either research and development or even acquisitions,” Strom says of life at March in the past few years prior to Delta’s ownership. “The handcuffs have come off, and we can go ahead and be much more aggressive.”
March’s first big move under its new bosses, finalized a few weeks ago, is a case in point.
The Kanata company acquired a state-of-the-art data-crunching platform called FOCUS Business Analytics from Polish tech startup DoIT Software in early October.
“It’s a relatively small acquisition for us, but very strategic,” Strom explains of March’s first M&A play under its new owners.
As part of the deal, March will be taking on about 15 DoIT employees and establishing a new advanced data analytics research hub in the eastern European country.
Strom says expanding into Poland not only gives March software capabilities it previously lacked, it also opens the door to a new source of highly skilled workers.
“The hunt for engineering talent is very fierce,” the veteran tech executive notes. “It’s slowing down a little bit now … but it’s been pretty competitive. What Poland does is it gives us another area where we can go out and get some of the talent we need.”
Facial-recognition technology
Strom says the FOCUS platform meshes perfectly with March’s own offerings, which use artificial intelligence to take data from video surveillance systems and help customers in the financial services and retail sectors detect potential fraud and gain deeper insights into their operations.
March’s advanced AI can already recognize whether someone in a drive-through restaurant line is a man or a woman, for example, and analyzes facial features to estimate customers’ ages in a bid to help fast-food outlets and other retailers get a better handle on who their customers actually are and when they’re shopping.
Strom says the FOCUS platform, which is expected to be ready for market in the first quarter of 2023, will drill down even deeper into that data to determine, for instance, how many customers over the age of 55 entered a restaurant during a certain time frame.
That intelligence could then be used to help retailers tailor their marketing campaigns to specific consumer groups, such as seniors or students.
“Understanding all that on-premise activity is critical for retailers today,” Strom explains.
It’s another step in the ongoing evolution of March Networks, which was founded 22 years ago and now boasts a customer lineup that includes hundreds of the world’s biggest financial institutions as well as retail giants like Walmart and U.S. quick-service food chain Dunkin’ Brands.
While the company’s sales took a hit early in the pandemic, Strom says March has bounced back. Thanks in part to new products like software that sends alerts when spaces exceed COVID-related capacity limits and a platform that helps cannabis producers track the growth and sale of their plants, the company is projecting double-digit revenue growth in 2022.
Even as he acknowledges that economic headwinds like rising inflation and ongoing supply-chain woes have sparked fears of a recession, Strom says he believes March is well-equipped to weather the storm.
Profitable venture
The 300-employee firm has been profitable almost from the get-go, he notes. Now, it has the backing of a well-heeled parent company that’s already shown it’s willing to pull out its chequebook to keep March on the cutting edge, whether that’s through R&D spending or buying technology from competitors.
“The appetite to be acquired will be a lot higher than maybe it was a year ago when venture-capital money was flowing in to some of these companies. We’re seeing some massive layoffs coming from companies that were really living on either venture capital or IPOs based on top-line growth only," says Strom.
“A lot of these unicorns were burning through cash. That cash is not available anymore, so they’re going to struggle. Companies like ourselves, which have always been focused on profitability and positive cash flow, it’s a lot easier for us to do the fundamental blocking and tackling.”
Despite the gloomy outlook for many sectors of the economy, Strom remains optimistic.
“I wouldn’t say we’re recession-proof, but generally there continues to be some significant concerns around things like cybersecurity and data privacy,” he says. “And because our product touches in those areas, I think we’ll be in pretty good shape.”
